In early September, the SEA20 network organised two online events with key stakeholders across the supply chain to discuss the impact of both regulations and market actions on accelerating maritime decarbonisation efforts.
The importance of collaboration between all stakeholders in the maritime ecosystem – from regulators, ports, and vessel owners to shipyards, fuel providers and technology manufacturers – was a common theme among the distinguished panel of speakers at the events. Jeremy Bentham, Vice President Global Business Environment, Shell stressed that as well as requiring effort from all stakeholders the rewards would also benefit everyone - societies, businesses and domestic economies alike – and that decarbonisation is not a threat but an opportunity.
Håkan Agnevall, President & CEO of Wärtsilä also stressed the need for cross-industry collaboration and the role that regulations can play as a catalyst and facilitator of more rapid change. For example, green fuels will be more expensive at first but their uptake could be hastened if regulators act to level the playing field with legacy fuels. It was noted that IMO regulations are seen as somewhat lacking in the ambition needed to address the scale of the decarbonisation challenge and that regional regulations, such as the EU's Fit for 55 legislation package, are more ambitious and helpful.
Martin Stopford, author and former president of Clarksons Research, echoed the sentiment about shared responsibility. While regulators set the goal, “In the end, it’s the shipping companies that need to put the ball in the goal…but it’s not just shipping companies, it’s shipbuilders, equipment manufacturers, ports, information providers.”
Andrea Morgante, Vice President Strategy, Wärtsilä Marine Power highlighted that in addition to fragmented regulations, a second challenge is the availability of cleaner fuels. While the technology to drastically cut emissions already exists, the rollout is hampered by a shortfall in the supply of carbon-neutral fuels, which in many cases are being widely used as ingredients for industrial processes but are not available for maritime applications.
In terms of the market pressures, Joep Gorgels, Global Head of Coverage Transportation, ABN AMRO Bank highlighted the fact that nowadays banks also need to think carefully about their business from a climate change perspective: “Our shareholders and stakeholders want us to make visible the greenhouse gas effect of our whole portfolio. The whole balance sheet of the bank needs to be more transparent in terms of what the footprint is.” One result of this is the Poseidon Principles, which is being developed to evaluate the footprint.
Gitte Gard Talmo, Chief Commercial Officer at Norwegian shipping company Eidesvik, also cited the Poseidon Principles as an example of how vessel owners are starting to be rewarded for investing in sustainability upgrades and retrofits. “In 2005 there was no reward for being green. Today, however, all of the stakeholders are moving in the same direction, so I’m positive.” It was noted that retrofitting the existing fleet to meet upcoming regulations was essential as it is estimated that 50% of the shipping emissions between now and 2050 will be produced by vessels that are already in service.
Mads Peter Zacho, Head of Industry Transition at the Maersk Mc-Kinney Moller Center for Zero Carbon Shipping noted that a further push is coming from the big consumer brands that represent some of shipping’s biggest customers. As they promise their end consumers more sustainable supply chains the natural consequence is that they require more sustainably operated container ships.
Asked about what they thought shipping would look like in 2050 and what developments would be needed to realise that vision, the panellists agreed that there was no silver bullet and that fuel and technology flexibility is key, with the best solutions depending on factors such as segment and location. And just as Uber didn’t originate from the taxi industry but from tech, the next disruptive force in shipping may also come from outside the industry.
The direction of travel is clear, dictated by both regulatory and market forces, and the destination is complete decarbonisation of the maritime sector. By harnessing these pressures and using them as catalysts to spark the rapid changes needed, all stakeholders – whether regulators, fuel suppliers or technology providers – can play their part in creating the carbon-neutral shipping we all aspire to.
SEA20 Call: Regulations accelerating decarbonisation
7 September 2021
Jeremy Bentham, Vice President Global Business Environment, Shell
Håkan Agnevall, President & CEO, Wärtsilä Corporation
David Cummins, President, Blue Sky Maritime
Jan Otto De Kat, Director, Global Sustainability Center, American Bureau of Shipping
Hu Keyi, Chief Designer, Jiangnan Shipyard
Andrea Morgante, Vice President Strategy, Wärtsilä Marine Power
Timothée Noël, Team Leader in the Unit in charge of International Carbon Market, Aviation and Maritime, DG CLIMA, European Commission
Sveinung Oftedal, Chair, IMO ISWG-GHG and Specialist Director, IMO negotiations, Norwegian Ministry of Climate and Environment
SEA20 Call: Market actions accelerating decarbonisation
14 September 2021
Gitte Gard Talmo, Chief Commercial Officer, Eidesvik
Joep Gorgels, Global Head of Coverage Transportation, ABN AMRO Bank
John Hatley, General Manager, Market Innovation, Wärtsilä
Kevin Humphreys, President, Marine & Offshore, Lloyd's Register Americas
Per Martin Tanggaard, Director Nor-Shipping, Norway Trade Fairs
Recordings of both events can be found via these links:
• SEA20 Call: Regulations accelerating decarbonisation
• SEA20 Call: Market actions accelerating decarbonisation